By Niket Nishant
(Reuters) -Rates and credit trading platform Tradeweb Markets (NASDAQ:TW) will buy investment technology firm Institutional Cash Distributors (ICD) for $785 million, it said on Monday, as it seeks to boost its appeal to corporate treasury professionals.
Corporate treasury teams manage the liquidity and other financial risks at large companies. They are also tasked with optimizing the companies' cash via short-term investments, and ensuring compliance.
The trading and brokerage industry has seen a wave of dealmaking activity over the past few years as companies look to expand beyond their core offerings.
Exchange operator Nasdaq bought regulatory reporting and capital markets software firm Adenza last year. Its rival Intercontinental Exchange (NYSE:ICE), which owns the New York Stock Exchange, bought mortgage software and analytics company Black Knight (BMV:BKIN).
ICD, established in 2003, allows corporate treasury teams to invest in money market funds and other short-term investment products. Its client base includes nearly 17% of the companies that make up the S&P 100 index.
The company also provides trade, analysis and research for investments and has a client retention rate of 99%.
"This transaction is consistent with the management's message of being bolder in mergers and acquisitions and complements the company's strong organic growth," Jefferies analysts wrote, noting that the market serving corporate treasury is "fast-growing".
Tradeweb said the deal, expected to close in the second half of 2024, will be financed with cash on hand.
Tradeweb's shares dipped 0.4%. So far this year, they have gained 12.7% as of their close last week.
Besides rates and credit, the company also allows trading in equities and money markets. Its customers include asset managers, hedge funds, financial institutions and retail clients.
Tradeweb is one of the few electronic trading platforms in the bond market, which has been slower to embrace digitization compared to the stock market.